Futures Climb After Jobs Data

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Stock futures gained on Friday morning despite a grim employment report, as traders were apparently prepared for much worse.

About 60 minutes before the start of trading in New York, futures on the Dow Jones Industrial Average were higher by about 60 points. S&P 500 and Nasdaq 100 futures were also modestly higher.

Nonfarm payrolls tumbled by 598,000 in January, the U.S. Labor Department said on Friday, the most since December 1974 and well above the 525,000 drop Wall Street economists in a Dow Jones Newswires survey expected.

Since the start of the current recession in December 2007, 3.6 million jobs have been lost, the government data showed. Half of those losses occurred in the last three months.

Numerous big companies have said they are planning extensive layoffs as the recession lurches into a second year. Claims for jobless benefits have remained at the highest levels in more than 20 years and spending by consumers has been reined in, a sign that many are building up their savings in the face of job cuts and still-falling home prices. That all suggests more economic pain in store.

All the same, stock traders appeared relieved that the report wasn't even worse. The market's attention is now likely to be focused on Washington, where a possible Senate vote on the Obama administration's stimulus proposals looms. The measure has been the subject of intense wrangling among lawmakers.

Markets are also looking ahead to Monday, when Treasury Secretary Timothy Geithner is expected to disclose the administration's plans to address still-ailing financial institutions. The creation of a "bad bank" to warehouse soured loans is widely expected. Banking shares have been extraordinarily volatile in the past few weeks as traders position themselves for the plan and try to scoop up small profits on the short-term moves of the stocks.

Among stocks to watch, shares of Hartford Financial Services Group were off by more than 17% after the insurer said it intends to cut its quarterly dividend by 84% to five cents a share after booking a steep loss.

Shares of JDS Uniphase were down more than 7% after the company reported a loss and said that revenue in its coming quarter would come in short of Wall Street forecasts. Shares of Evergreen Solar slumped 7% after the solar-panel maker said it swung to a fourth-quarter net loss amid $40.8 million in charges.

Overseas markets were generally stronger. Shipping stocks in Asia gained as a climb in the Baltic Dry Index, a closely watched trade indicator, continued to garner attention. The Nikkei 225 rose 1.6% in Tokyo and the Hang Seng rose 3.6% in Hong Kong.

European stocks also rose, with luxury plays like LVMH, Hermes and BMW advancing. The FTSE 100 rose 0.5% in London and the German DAX 30 rose 0.5% in Frankfurt.